Economic Indicator of Bank Austria Climbed Downward

The economic outlook in Austria has noticeably deteriorated in the fall. The economic indicator of Bank Austria fell to minus 2.2 points in September. Thus, the sentiment is practically back to the level of spring after a temporary high in the summer.

''Particularly in the domestic industry and service sector, economic concerns have increased significantly,'' said UniCredit Bank Austria Chief Economist Stefan Bruckbauer today in a statement.

The reason for the deterioration is the high inflation rates of recent months, which have damaged consumer confidence. The rise to 3.4 percent is slowing consumer demand and burdening the service sector. Additionally, rising costs and U.S. protectionism have led to pessimism in the domestic industry.

Bank Austria expects lower inflation

Bank Austria expects inflation to rise to 3.5 percent in 2025 before it decreases the following year. ''At the beginning of 2026, inflation will decrease sharply as the expiration of the electricity price cap is removed from the calculation,'' said UniCredit Bank Austria Economist Walter Pudschedl. Inflation would still remain above the 2 percent level in the Eurozone.

The domestic economy is expected to grow by 0.3 percent this year and by 1 percent next year, thanks to domestic demand.

For the labor market, Pudschedl expects stabilization. ''After an increase in the unemployment rate to an average of 7.5 percent in 2025, a slight decrease to 7.4 percent could already occur in 2026,'' said Pudschedl.

(APA/Red)

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